[Financial Performance Highlights](index=1&type=section&id=Financial%20Performance%20Highlights) RCM Technologies achieved robust revenue growth and enhanced adjusted profitability in Q2 and H1 2025 [Second Quarter 2025 Performance](index=1&type=section&id=Second%20Quarter%202025%20Performance) RCM Technologies reported a 13.0% year-over-year increase in revenue to $78.2 million for the second quarter of 2025. While GAAP net income remained flat at $3.8 million, adjusted net income per diluted share grew by a strong 21.1% to $0.69, reflecting improved underlying operational profitability Q2 2025 vs Q2 2024 Key Financial Metrics | Metric | Q2 2025 (Thirteen weeks ended June 28, 2025) | Q2 2024 (Thirteen weeks ended June 29, 2024) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $78.2 million | $69.2 million | +13.0% | | **Gross Profit** | $22.3 million | $20.0 million | +11.4% | | **GAAP Net Income** | $3.8 million | $3.8 million | 0.0% | | **GAAP Diluted EPS** | $0.50 | $0.47 | +6.4% | | **Adjusted EBITDA (Non-GAAP)** | $8.1 million | $7.2 million | +12.5% | | **Adjusted Diluted EPS (Non-GAAP)** | $0.69 | $0.57 | +21.1% | [Year-to-Date 2025 Performance](index=1&type=section&id=Year-to-Date%202025%20Performance) For the first half of 2025, revenue increased by 15.3% to $162.6 million compared to the same period in 2024. This top-line growth translated to an 18.9% increase in adjusted net income per diluted share, which reached $1.32 H1 2025 vs H1 2024 Key Financial Metrics | Metric | H1 2025 (Twenty-six weeks ended June 28, 2025) | H1 2024 (Twenty-six weeks ended June 29, 2024) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $162.6 million | $141.1 million | +15.3% | | **Gross Profit** | $44.3 million | $40.4 million | +9.6% | | **GAAP Net Income** | $8.0 million | $7.7 million | +3.9% | | **GAAP Diluted EPS** | $1.04 | $0.95 | +9.5% | | **Adjusted EBITDA (Non-GAAP)** | $15.9 million | $14.0 million | +13.6% | | **Adjusted Diluted EPS (Non-GAAP)** | $1.32 | $1.11 | +18.9% | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management expressed a positive outlook, highlighting consistent growth across all business segments during the second quarter. They specifically pointed to growing momentum in the Engineering division and are anticipating a strong second half of the year - Executive Chairman Bradley Vizi emphasized the resilience of the business model, citing consistent growth across all three segments and building towards an expected strong second half of the year[5](index=5&type=chunk) - CFO Kevin Miller noted that momentum within the Engineering segment continues to build, suggesting the company is unlocking the next phase of growth in that business[5](index=5&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Consolidated statements for Q2 and H1 2025 show revenue growth, increased operating expenses, and shifts in cash flow [Statements of Operations](index=3&type=section&id=Statements%20of%20Operations) The consolidated statements of operations detail a year-over-year revenue increase for both the second quarter and first half of 2025. However, growth in operating income was tempered by higher cost of services and a significant rise in Selling, General and Administrative (SG&A) expenses, which grew by 12.8% in the second quarter Q2 Income Statement Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $78,166 | $69,164 | 13.0% | | Gross Profit | $22,277 | $20,001 | 11.4% | | SG&A | $15,275 | $13,545 | 12.8% | | Operating Income | $6,601 | $5,819 | 13.4% | | Net Income | $3,785 | $3,762 | 0.6% | H1 Income Statement Highlights (in thousands) | Account | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $162,639 | $141,103 | 15.3% | | Gross Profit | $44,255 | $40,368 | 9.6% | | Operating Income | $13,184 | $11,655 | 13.1% | | Net Income | $7,971 | $7,714 | 3.3% | [Balance Sheets](index=7&type=section&id=Balance%20Sheets) As of June 28, 2025, the company's balance sheet strengthened, with total assets increasing to $135.6 million and total stockholders' equity rising by 12.8% to $37.8 million since year-end 2024. Key changes in current assets and liabilities include an increase in accounts receivable and a significant rise in deferred revenue, offset by a decrease in accounts payable Selected Balance Sheet Data (in thousands) | Account | June 28, 2025 | Dec 28, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Current Assets | $100,709 | $97,038 | 3.8% | | Total Assets | $135,586 | $132,077 | 2.7% | | Total Current Liabilities | $54,490 | $53,633 | 1.6% | | Borrowings under line of credit | $34,015 | $34,967 | -2.7% | | Total Stockholders' Equity | $37,786 | $33,484 | 12.8% | [Statements of Cash Flows](index=9&type=section&id=Statements%20of%20Cash%20Flows) For the first half of 2025, net cash provided by operating activities was $8.8 million, a decrease from $12.2 million in the prior-year period, primarily driven by a $15.3 million increase in accounts receivable during the second quarter. The company used $7.1 million for financing activities, largely for treasury stock repurchases, compared to $13.5 million in the first half of 2024 - In Q2 2025, the company experienced a net cash usage of **$7.9 million** from operating activities, a stark contrast to the **$5.7 million** provided by operations in Q2 2024. This was mainly due to a significant increase in accounts receivable[23](index=23&type=chunk) H1 Cash Flow Summary (in thousands) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,782 | $12,151 | | Net cash used in investing activities | ($900) | ($1,067) | | Net cash used in financing activities | ($7,092) | ($13,510) | | **Increase (decrease) in cash** | **$743** | **($2,804)** | [Segment Performance](index=6&type=section&id=Segment%20Performance) Q2 2025 segment performance shows strong revenue growth in Specialty Health Care and Engineering, with varied margin trends [Segment Revenue and Gross Profit Analysis](index=6&type=section&id=Segment%20Revenue%20and%20Gross%20Profit%20Analysis) In Q2 2025, growth was led by the Specialty Health Care and Engineering segments, with revenues increasing 15.9% and 17.8% YoY, respectively. The Life Sciences, Data and Solutions segment experienced a 9.3% revenue decline. Gross profit margins compressed slightly in the Engineering segment from 26.5% to 24.5%, while the Life Sciences, Data and Solutions segment saw margin expansion to 39.8% Q2 2025 Revenue by Segment (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Specialty Health Care | $42,822 | $36,932 | +15.9% | | Engineering | $26,521 | $22,508 | +17.8% | | Life Sciences, Data and Solutions | $8,823 | $9,724 | -9.3% | | **Consolidated** | **$78,166** | **$69,164** | **+13.0%** | Q2 2025 Gross Profit Margin by Segment | Segment | Q2 2025 Gross Profit Margin | Q2 2024 Gross Profit Margin | Change (bps) | | :--- | :--- | :--- | :--- | | Specialty Health Care | 28.7% | 28.8% | -10 bps | | Engineering | 24.5% | 26.5% | -200 bps | | Life Sciences, Data and Solutions | 39.8% | 34.9% | +490 bps | | **Consolidated** | **28.5%** | **28.9%** | **-40 bps** | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP metrics provide a clearer view of operational performance by adjusting for non-recurring and non-cash items [Reconciliation of GAAP to Non-GAAP Results](index=4&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) The company provides non-GAAP metrics to offer a clearer view of ongoing operational performance by excluding items such as equity compensation, foreign currency transaction impacts, and potential financing costs. For Q2 2025, Adjusted EBITDA increased to $8.1 million from $7.2 million YoY. Adjusted net income grew to $5.2 million ($0.69 per diluted share) from $4.6 million ($0.57 per diluted share) in the prior-year quarter Reconciliation of GAAP Net Income to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Net Income** | **$3,785** | **$3,762** | **$7,971** | **$7,714** | | Income tax expense | 1,887 | 1,483 | 3,586 | 2,941 | | Interest expense, net | 650 | 581 | 1,301 | 1,059 | | Depreciation & Amortization | 401 | 378 | 825 | 710 | | **EBITDA (Non-GAAP)** | **$6,723** | **$6,204** | **$13,683** | **$12,424** | | Other Adjustments* | 1,412 | 1,004 | 2,232 | 1,587 | | **Adjusted EBITDA (Non-GAAP)** | **$8,135** | **$7,208** | **$15,915** | **$14,011** | *Other Adjustments include Equity compensation, foreign currency transactions, and potential financing transactions Reconciliation of GAAP to Adjusted Diluted EPS | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Diluted EPS** | **$0.50** | **$0.47** | **$1.04** | **$0.95** | | Adjustments | $0.19 | $0.10 | $0.28 | $0.16 | | **Adjusted Diluted EPS (Non-GAAP)** | **$0.69** | **$0.57** | **$1.32** | **$1.11** |

Financial Data and Key Metrics Changes - Consolidated gross profit for Q2 2025 was $22.3 million, an increase of 11.4% compared to Q2 2024, marking the highest gross profit in the past 13 quarters [16] - Adjusted EBITDA for Q2 2025 was $8.1 million, up 12.9% from $7.2 million in Q2 2024 [16] - Adjusted EPS for Q2 2025 was $0.69, a growth of 21.1% from $0.57 in Q2 2024 [16] Business Line Data and Key Metrics Changes - In Healthcare, gross profit for Q2 2025 was $12.3 million, a 15.4% increase from $10.6 million in Q2 2024 [16] - School revenue for Q2 2025 was $37.2 million, up 21.1% from $30.7 million in Q2 2024 [17] - In Engineering, gross profit for Q2 2025 was $6.5 million, an 8.8% increase from $6.0 million in Q2 2024, marking the best engineering gross profit quarter in history [17] - In IT, Life Sciences, and Data Solutions, gross profit for Q2 2025 was $3.5 million, a 3.4% increase from $3.4 million in Q2 2024 [18] Market Data and Key Metrics Changes - The company has seen strong growth in the healthcare services group, driven by quality, innovation, and client satisfaction, with a robust pipeline for future opportunities [4][5] - The life sciences division is experiencing momentum due to investments in AI-driven equipment qualification and data integrity solutions, enhancing competitive positioning [6][7] - The Aerospace and Defense Group exceeded revenue goals by nearly $3 million in Q2 2025, with significant year-over-year increases in gross margin and EBITDA [12] Company Strategy and Development Direction - The company is focused on aligning talent in growth markets and strengthening brand equity to diversify and enhance the core client base [3] - A strategic emphasis on digital transformation and operational excellence is evident in the life sciences division, with a dedicated engineering group being established [6][7] - The engineering segment is integrating custom engineering capabilities with turnkey EPC solutions to meet increasing market demand [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering the new school year with strong momentum and a robust pipeline of opportunities [4][5] - The company anticipates continued low double-digit growth in adjusted EBITDA for 2025, with expectations for Q4 2025 to be the highest adjusted EBITDA quarter of the year [19] - Management highlighted the potential for significant growth in the aerospace and defense sector, driven by new contracts and existing client relationships [14] Other Important Information - The company has been included in the Russell 2000 Growth Index for the first time, marking a significant milestone [3] - There is a noted seasonality in Q3 due to summer school closures, which complicates forecasting [19] Q&A Session Summary Question: Insights on data center infrastructure and multiyear agreements - Management indicated that marquee projects are enhancing brand equity and attracting attention, leading to increased business opportunities [24][25] Question: Expansion in healthcare contracts - The majority of new contracts are in the K-12 sector, with management expressing excitement about the upcoming school year [29][30] Question: Engineering gross margins and new contracts - Management noted that while new contracts may start at lower margins, the focus remains on maintaining competitive pricing and quality [50][53] Question: Cash collections and receivables - Management explained that receivables were impacted by two schools running out of funds, but they expect to collect the majority soon [56][57] Question: Immigration and nurse supply - Management is confident in growth regardless of immigration policies, but noted that increased nurse supply could enhance future performance [61][62] Question: Dividend considerations - Management acknowledged the potential for a dividend given the company's strong position and reduced share count, but emphasized ongoing evaluations [71][72]

Financial Performance - RCM Technologies, Inc. reported quarterly earnings of $0.69 per share, exceeding the Zacks Consensus Estimate of $0.61 per share, and up from $0.56 per share a year ago, representing an earnings surprise of +13.11% [1] - The company posted revenues of $78.17 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.02%, and an increase from $69.16 million year-over-year [2] Market Performance - RCM Technologies shares have increased approximately 6.3% since the beginning of the year, compared to the S&P 500's gain of 7.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $68.26 million, and for the current fiscal year, it is $2.20 on revenues of $313.89 million [7] - The estimate revisions trend for RCM Technologies was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Staffing Firms industry, to which RCM Technologies belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - RCM Technologies reported revenue of $78.2 million for the thirteen weeks ended June 28, 2025, representing a 13.0% increase from $69.2 million for the same period in 2024 [2] - For the twenty-six weeks ended June 28, 2025, revenue was $162.6 million, an increase of 15.3% compared to $141.1 million for the same period in 2024 [3] - Gross profit for the current quarter was $22.3 million, an 11.4% increase from $20.0 million in the prior year [2] - The company achieved GAAP net income of $3.8 million, or $0.50 per diluted share, for the current quarter, compared to $3.8 million, or $0.47 per diluted share, for the same quarter last year [2] - Adjusted EBITDA for the current quarter was $8.1 million, up from $7.2 million in the comparable prior quarter [2] Segment Performance - Revenue from the Specialty Health Care segment was $42.8 million for the thirteen weeks ended June 28, 2025, compared to $36.9 million in the prior year [16] - Engineering segment revenue was $26.5 million for the current quarter, up from $22.5 million in the same quarter last year [16] - Data and Solutions segment revenue was $8.8 million for the current quarter, down from $9.7 million in the prior year [16] Operational Insights - The company experienced a gross profit margin of 28.5% for the current quarter, slightly down from 28.9% in the prior year [16] - Operating income for the thirteen weeks ended June 28, 2025, was $6.6 million, compared to $5.8 million for the same period in 2024 [13] - The company’s total assets increased to $135.6 million as of June 28, 2025, from $132.1 million at the end of the previous year [19] Management Commentary - Bradley Vizi, Executive Chairman, noted consistent growth across all segments, indicating resilience in the business model [4] - Kevin Miller, Chief Financial Officer, highlighted the momentum in the Engineering segment as a key driver for future growth [4]

Industry Overview - The Zacks Staffing industry encompasses a wide range of human resources and workforce solutions, including recruitment, payroll administration, and organizational consulting services tailored for various sectors [2] - The industry is currently facing challenges due to a contraction in the manufacturing sector, which negatively impacts the demand for temporary workers [3] Current Trends - The staffing industry is expected to recover to pre-pandemic revenues, income, and cash flows despite the ongoing contraction in manufacturing [3] - There is an increased adoption of remote work and hybrid models, prompting staffing agencies to prioritize flexible staffing solutions to meet evolving workplace preferences [4] - Technology is increasingly being utilized in the staffing sector to enhance operations, with AI-driven tools and platforms improving the efficiency of attracting and onboarding talent [5] Market Performance - The Zacks Staffing Firms industry has underperformed compared to the broader sector and the S&P 500, declining 32% over the past year, while the S&P 500 grew by 15.9% [8] - The industry currently trades at an EV-to-EBITDA ratio of 6.53X, significantly lower than the S&P 500's 18.03X and the sector's 11.37X [11] Company Highlights - **Korn Ferry (KFY)**: This firm is leveraging its broad array of solutions and large-scale client engagements, with a focus on technology and AI investments. KFY's digital subscription and license business is enhancing revenue stability [14][15] KFY has a Zacks Rank 3 and a consensus estimate for its 2025 bottom line at $5.16, reflecting an 11% increase over the past 60 days [17] - **RCM Technologies (RCMT)**: RCMT is transitioning into an innovative company with a strong growth narrative in its healthcare segment, particularly in K-12 behavioral health. The company is also expanding in life sciences and engineering, supported by multi-year contracts [20][22] RCMT holds a Zacks Rank 3 with a consensus estimate for its 2025 bottom line at $2.2 [22] - **Heidrick & Struggles International (HSII)**: HSII focuses on value creation through effective leadership placement, supported by a diversified revenue model and zero debt. The company has a Zacks Rank 3 and a consensus estimate for 2025 EPS at $2.86 [25][27]

Group 1 - RCM Technologies, Inc. closed at $25.85, reflecting a -1.07% change from the previous day, underperforming the S&P 500's gain of 0.4% [1] - Over the past month, RCM Technologies' shares increased by 12.17%, outperforming the Business Services sector's decline of 0.55% and the S&P 500's increase of 4.61% [1] Group 2 - Analysts expect RCM Technologies to report earnings of $0.61 per share, indicating a year-over-year growth of 8.93%, with revenue projected at $78.15 million, representing a 13% increase compared to the same quarter last year [2] - For the full year, earnings are projected at $2.2 per share and revenue at $313.89 million, reflecting changes of +8.37% and +12.76% respectively from the previous year [3] Group 3 - Changes in analyst estimates for RCM Technologies are important as they reflect short-term business trends, with positive revisions indicating analyst optimism about the company's profitability [4] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown a strong track record, with 1 rated stocks delivering an average annual return of +25% since 1988; RCM Technologies currently holds a Zacks Rank of 3 (Hold) [5][6] Group 4 - RCM Technologies has a Forward P/E ratio of 11.88, which is lower than the industry average Forward P/E of 16.43, indicating a valuation discount [7] - The Staffing Firms industry, part of the Business Services sector, has a Zacks Industry Rank of 153, placing it in the bottom 39% of over 250 industries [7] Group 5 - The strength of individual industry groups is measured by the Zacks Industry Rank, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Group 1 - RCM Technologies, Inc. closed at $26.64, with a decrease of -1.33% from the previous trading session, which is less than the S&P 500's daily loss of 0.07% [1] - The stock has increased by 16.68% over the past month, outperforming the Business Services sector's decline of 2.31% and the S&P 500's gain of 3.94% [1] Group 2 - RCM Technologies, Inc. is projected to report earnings of $0.6 per share, reflecting a year-over-year growth of 7.14%, with quarterly revenue expected to be $78.15 million, up 13% from the previous year [2] - For the full year, earnings are estimated at $2.19 per share and revenue at $313.89 million, indicating changes of +7.88% and +12.76% respectively from the prior year [3] Group 3 - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks RCM Technologies, Inc. at 3 (Hold) [5] - The Forward P/E ratio for RCM Technologies, Inc. is 12.33, which is lower than the industry average of 16.81, indicating that the company is trading at a discount compared to its peers [6] Group 4 - The Staffing Firms industry, part of the Business Services sector, has a Zacks Industry Rank of 180, placing it in the bottom 28% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - RCM Technologies, Inc. closed at $25.27, with a daily increase of +1.85%, outperforming the S&P 500's gain of 0.48% [1] - Over the last month, the company's shares increased by 9.83%, while the Business Services sector experienced a loss of 0.6% [1] - The upcoming earnings disclosure is projected to show an EPS of $0.6, a 7.14% increase year-over-year, and revenue of $78.15 million, reflecting a 13% increase [2] Group 2 - For the full year, analysts expect earnings of $2.19 per share and revenue of $313.89 million, representing increases of +7.88% and +12.76% respectively [3] - Recent revisions to analyst forecasts are important as they indicate short-term business trends, with positive revisions suggesting analyst optimism [4] - The Zacks Rank system, which evaluates estimate changes, currently ranks RCM Technologies, Inc. at 3 (Hold) [6] Group 3 - RCM Technologies, Inc. has a Forward P/E ratio of 11.33, which is lower than the industry average of 16.24 [7] - The Staffing Firms industry, part of the Business Services sector, has a Zacks Industry Rank of 185, placing it in the bottom 26% of over 250 industries [7] - The Zacks Industry Rank indicates that top-rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Overview - RCM Technologies, Inc. is a provider of solutions aimed at enhancing client performance through advanced engineering, specialty healthcare, and technology services [1][3] - The company operates in key market segments including Healthcare, Engineering, Aerospace & Defense, Process & Industrial, Life Sciences, and Data & Solutions [3] Recent Developments - RCM Technologies was added to the Russell 3000 and small-cap Russell 2000 Indexes effective June 30, 2025, marking a significant milestone in the company's history [1][2] - The addition to the Russell 2000 is seen as the beginning of a new phase for the company, aiming to contribute to global infrastructure development [2] Market Context - Russell Indexes are widely utilized by investment managers and institutional investors, with approximately $10.6 trillion in assets benchmarked against the Russell US Indexes as of June 2024 [2] - FTSE Russell, the global index provider, calculates thousands of indexes covering 98% of the investable market globally, with around $18.1 trillion benchmarked to its indexes [4]

Group 1 - The article discusses RCM Technologies, Inc. (RCMT) and references previous analysis conducted after the third-quarter 2024 results were released [1] - It highlights that Robert F. Abbott has been involved in investing since 1995 and has experience with options trading since 2010 [1] Group 2 - No relevant financial performance data or specific company metrics are provided in the documents [2][3]